To determine the marginal social cost (MSC) of abatement, we find the sum of
A) MPC + MAC
B) $\Sigma$MAC + MCE
C) MAC + $\Sigma$MCE
D) MAC + $\Sigma$MEC

Question

To determine the marginal social cost (MSC) of abatement, we find the sum of
A) MPC + MAC
B)  $\Sigma$MAC + MCE
C) MAC + $\Sigma$MCE
D) MAC + $\Sigma$MEC

Quizplus · Accepted Answer

To determine the marginal social cost (MSC) of abatement, we need to consider both the marginal private cost (MPC) and marginal abatement cost (MAC). Hence, the correct formula would be: MSC = MPC + MAC. Option A includes MPC but misses MAC. Option C and D include MAC but miss MPC. Option B not only includes both MPC and MAC but also considers the fee F1F1F1S1F1F1F10 charged for emissions and the marginal damage cost (MCE) as well. Therefore, the correct answer is B.

To Determine the Marginal Social Cost (MSC) of Abatement, We Σ\SigmaΣ

To Determine the Marginal Social Cost (MSC) of Abatement, We $\Sigma$